GM's Mary Barra On Tesla-Like Price Cuts: 'Price Them Right To Begin With'

General Motors Co. (NYSE:GM) CEO Mary Barra addressed the issue of price cuts in the company's first-quarter earnings call on Tuesday.

What Happened: GM is focused on two things in the U.S.- getting vehicles out there and working on pricing around costs, said Barra.

“We think we price them right to begin with,” said Barra. GM’s vehicles starts at very important points- Lyriq below 60,000, Equinox at around 30,000 and the Blazer in the mid-40s, she added. The automaker is also working on a $2 billion structural cost reduction whose enterprise value will be greater.

“We still think we are well positioned to achieve the low mid-single — low- to mid-single-digit margins in 2025,” the CEO said. For full-year 2023, the company now sees EBIT-adjusted in the range of $11 billion to $13 billion as compared to the previous guidance of $10.5 billion-$12.5 billion.

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Why It Matters: Barra’s comments are notable as earlier in the month Elon Musk-led Tesla Inc (NASDAQ:TSLA) announced a fresh round of price cuts including a $1,000 price cut each for the two Model 3 variants and reductions ranging from 3.4% and 5.6% for the rest of its models. This is the latest in the line of Tesla’s price cuts which commenced with the price cuts of up to 19.7% announced in mid-January.

The slew of price cuts enabled better first-quarter deliveries for the EV giant and added pressure on rival EV makers to cut costs to battle competition.

For the first quarter, GM reported revenue of $40.0 billion, net income attributable to stockholders of $2.4 billion, and EBIT-adjusted of $3.8 billion, according to a prior report.

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